Australian Post Privatisation Debate Continues Despite Gov't Denial

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By Reissa Su | January 8, 2014 5:08 PM EST

The privatisation of the Australian Post has triggered a heated debate after the Australian Competition and Consumer Commission chairman, Rod Sims, was reportedly convincing Prime Minister Tony Abbott to consider selling government-owned assets.

REUTERS
A street cleaner passes a Royal Mail post box in central London June 14, 2011.

Following the news, the Australian Labor Party has demanded that the government will be transparent in its plans of selling the postal service. The subject has sparked a debate which led Mr Sims to defend his comment and told the press he was merely discussing the benefits of privatisation. He denied referring to anything in particular.

However, Mr Sims was quoted as saying that privatisation will help boost Australia's productivity. He also mentioned that the government should consider its assets in its "root and branch" review of competition laws.

In general, Mr Sims declared that commercial enterprises are better run if left in the hands of the private sector rather than the government.

Stephen King, a former ACCC commissioner, supported the sale of Australian Post with conviction. He remarked that the national broadband network will make the traditional letter redundant. Mr King believes the Australian Post should be sold to the private sector.

Labor and the unions have criticised the thought of selling the Australian Post. Acting shadow communications minister Michelle Rowland said communities in Australia "will be worse off," especially the people living in rural and regional areas who depend on the postal service.

Communications Minister Malcolm Turnbull remarked that the federal government had no intention of selling the Australian Post.

Experts have warned that the Australian Post could be undervalued if the government rushed the sale. The recent sale of Britain's mail service, the Royal Mail, in October 2012 earned the UK government $3.3 billion. Since the sale of the Royal Mail, shares have increased 75 per cent which led to reports of undervaluing the service.

Nicholas Reece, former Prime Minister Julia Gillard's adviser and public policy fellow at the University of Melbourne, admitted the sale of Australian Post could be beneficial to the organisation and the Australian economy. However, Mr Reece emphasised the use of caution in the government's approach. He said the government should consider its service obligations and the welfare of 32,000 post office employees.

The Australian Post is required by law to provide a letter of service to all Australians and must remain accessible no matter where they live.

Ian McAuley, a University of Canberra lecturer on public finance, believes the privatisation of the Australian Post will make the postal service less accessible.

Despite the arguments, the ultimate decision rests on the hands of federal government. Those who are against the sale of Australia's postal service are hoping the Abbott government will consider making the right choice. 

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(Photo: REUTERS / Chris Helgren)
A street cleaner passes a Royal Mail post box in central London June 14, 2011.
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